By Philip Maina
2 months agoSun Jun 09 2024 06:11:11
Reading Time: 2 minutes
- The creators of the Evolved Apes NFT collection have been charged in court for defrauding investors
- The entities reportedly pocketed over $2 million after conducting a rug pull
- They’ve been slapped with money laundering and wire fraud charges
A New York court has charged three individuals connected to the Evolved Ape NFT collection with money laundering and wire fraud charges. The three allegedly pocketed close to $3 million after selling collectibles with a promise of creating a game to increase the NFTs’ utility only for the developers to abandon the project and varnish with investors’ funds. The court said that although the NFTs are a new phenomenon, “old rules still apply,” something that’s likely to increase law enforcement agencies’ involvement in crimes committed in the web3 space.
False Promises for Money are Illegal
According to court details , the three are British nationals and the crime took place in 2021. The United States’ Attorney Damian Williams said that although the crime involves digital art, it’s illegal to “make false promises for money.”
At the time, the Evolved Apes NFT team even released a roadmap detailing the development process of the blockchain game, something the court believes increased investors’ confidence in the project.
A few days after releasing the roadmap, the developers pulled down the project’s website, leaving collectors in the dark. One of the accused later withdrew the project’s funds into a personal wallet .
The New York court intends to compel the three to return less than $900,000 still held in the wallet. If found guilty, the three can face up to 40 years each in prison, since each of the charges carries a maximum prison time of 20 years.
NFT Creator Refunds Investors
This isn’t the first case of NFT developers being charged for ghosting investors. Seven months ago, Mutant Ape Planet NFT creator pleaded guilty to wire fraud charges and admitted to pocketing $3 million after making false promises to lure investors.
Youtuber and wrestler Logan Paul has also in the past announced that he’ll refund NFT investors their money after he was unable to fulfill his promise of making an NFT game.
With the three being charged, it’s to be seen whether the case will help lower the number of rug pulls in the NFT sector.
